Ladies and gentlemen, good morning, and welcome to the Q2 and first half 2021 financial results of IHH Healthcare Berhad analyst briefing conference call. I would now like to hand the call over to your first speaker today, Ms. Penelope Koh from Investor Relations at IHH. Please go ahead, Ms. Koh. Thank you. Good morning and welcome to IHH Healthcare second quarter and first half 2021 earnings call for the period ended June 30th 2021. Thank you for joining us today. I'm Penelope Koh from Investor Relations. With me on the call today are Dr. Kelvin Loh, Managing Director and CEO, Joerg Ayrle, our Group CFO. We also have our colleague, Evren, who is the Head of Strategic Planning and Investments from Acibadem. For those of you on the web, you'll be able to view and download our presentation slides as well as the press release. The materials are also available for download on the IHH website. As for the sequence of events, Dr. Loh will share with us the key highlights for the second quarter and an update on the COVID-19 contribution for the group. Thereafter, Jörg will provide the financial and operational performance before Dr. Loh wraps up by discussing the sustainability journey and the outlook for the group. We'll have a Q&A session after the presentation. With that, I'll turn over the call to Dr. Loh. Dr. Loh, please. Thanks, Penny. Before we start with the results, I would like to take the opportunity to say a big thank you to our frontline health workers for staying resilient, managing the COVID-19 situation, taking best care of our patients. The good news is that the COVID-19 restrictions have recently been more relaxed, in some of the countries we operate in, especially for fully vaccinated people. Social restrictions are lesser now, daily reported cases and deaths going down in many places that we operate. Of course, no room for complacency. The Delta variant is still rife and making things complicated, and so the pandemic war is far from over. India and Malaysia and Turkey still has five-digit cases daily, and our colleagues continue to battle this every day and cope with the situation. I understand how stressed they can be from this prolonged crisis, and so we are doing all we can to look after them. We are conducting vaccination camps. We're helping out, with mental health and wellness, taking care of their loved ones as best as we can as well during this time. These are challenging times, and there's no doubt about that. We will get through this, and we'll get through this by working together. We continue to ramp up our COVID-19 support efforts, and there is no better time than now to demonstrate our commitment as a healthcare provider and deepen our trust with patients, governments, and our community. In Malaysia, for example, we continue to conduct COVID-19 lab testing and treat non-COVID patients decanted from government hospitals so that we can help them manage this load. In fact, more than 600 COVID patients have been treated in Q2 in Malaysia. On vaccination front, we are running 19 vaccination centers through our vaccination service. In Singapore, we continue, of course, to do lots of COVID prevention services, including border screening, on-arrival testing, and lots of tests as well. In Turkey, we're in India, similarly continuing with lab testing and treating COVID, even in patients. Of course, helping with vaccination drives, too. Going on to slide four. I'd like to give you a sense, clinically, on our operations. In Malaysia, PCMC conducted its 101st kidney transplant and also marked its 12th year in clinical excellence since opening. Pantai Hospital Penang became the first hospital in the northern region of Malaysia to conduct a drive-through vaccination service. I'm also very proud of our five nurses who received the Nurses Day Merit Award, awarded by Singapore's Ministry of Health for outstanding performance. In Turkey, Acibadem was rewarded with the Golden Award for Health Institutions at the Social Media Awards Turkey. In Europe, our Tokuda Hospital passed with honors in an international quality assessment for COVID-19 diagnostics, and Acibadem Sistina opened up a premium physical therapy sports center. Turning on to page 6, on revenue. Revenue grew 66%, a bit from a lower base in Q2 2020, when the lockdown of COVID-19 started. This was further boosted by COVID-19 services that we have been rendering, such as testing, screening, and vaccination services. There was also a small contribution from the consolidation of DDRC SRL since April 2021 and also our acquisition of PCMC in September 2020. Correspondingly, EBITDA has increased to MYR 1.1 billion. Net operating income increased to MYR 463.6 million. Net income itself grew to MYR 483 million on the back of stronger EBITDA as more patients returned to our hospitals and from COVID-19 support services provided. Importantly, cost savings has contributed to this in India, and in Gleneagles Hong Kong. Gleneagles Hong Kong, in fact, achieved EBITDA breakeven in May 2021, and has been on a positive trajectory since. This net income also includes the remeasurement to fair value of our interest in DDRC SRL, disposal gains from Apollo Gleneagles Hospitals, which were, of course, then offset by a substantive write-down of our Parkway Yangon Hospital and Gleneagles Chengdu Hospital. If you turn with me to slide 7, we have put together this new slide to show you our performance in the last eight quarters so we can see the trend. You'll see in Q4 2019 and Q1 2020 an overall dip, which was due to COVID-19. We have seen that progressive, sustained recovery as we move towards the right-hand of the chart, which is where we are today. In fact, in Q2 2021, we recorded our highest EBITDA and net income over the past eight quarters, and even above pre-COVID levels, which is encouraging. Moving to slide eight. I'm happy to report that IHH has shown a strong performance across all markets in Q2 on a year-on-year basis. However, I'd like to qualify that Q2 2020 last year was, of course, a low base because of major lockdowns and restrictions due to COVID-19. Patient volumes have picked up. We have introduced a lot more COVID-19 related services as the pandemic continues. With that, let me now pass the time over to Jörg to speak on the returns and capital efficiency on the next slide. Yeah. Thanks a lot, Kelvin, welcome everybody this morning. Let's turn to page eght, capital efficiency ratios. Look, it's pretty obvious on this page, we've achieved 7.2% return on equity. I guess, if you do the math, you will see that this is likely a little bit higher than where we would see a run rate ROE range. What you do notice on this page, there has been a structural shift in terms of equity performance. We show steady returns since the height of COVID-19 in Q2 2020. Strong recovery. In fact, if you look at this second quarter, we've surpassed the initial targets we've set for ourselves. It highlights the doubling ROE from a low, last year was a way mark. It was a stepping stone to then think about where should actually our long-term ROE and ROCEs targets be. Our net debt ratios have improved, which shows extremely strong cash generation during this period. I want to thank all our hospitals and all our operators out there for being diligent in terms of working capital build-up, in terms of inventory build-up, in terms of CapEx spending, be really prudent and spend what is needed, to keep themselves in check, in terms of what would be, of course, desired. That's a really strong thing. One comment here, we've changed the net debt definition to include lease liabilities. I think that's more market standard in terms of this. In the next page, a quick picture on how are we diversified in terms of markets, revenue contribution. Singapore, of course, in revenue and EBITDA remains the strongest contributor. We see Malaysia with a strong nearly 20%. We see Turkey and Europe, which basically gives us a nearly 30% profit contribution. India is now clearly in a strong position of contribution in terms of EBITDA and revenue. Really nice four-pillar picture. You will see later on Turkey, really happy to see a very strong EBITDA performance, that has led the business to be net income positive and return bottom line contributions to the company. Let me pass back to Kelvin to look for further operational highlights. Thank you, Jörg. Please turn with me to slide 12, where I'll take you through some of these operational highlights. From last month in July, we extended our strategic collaboration with Parkway Life REIT to extend our lease agreements for our three hospitals in Singapore. As you know, these three hospitals are located in the prime locations of Singapore and are the top performers for the group. We are very pleased to be able to extend these lease agreements as it means business continuity and, of course, operational stability. The rent is well in line with prevailing market rates, and we do not foresee any material financial impact for our profit. We are also getting SGD 150 million in upgrades to our facilities, which will be provided by the landlord, and they will help us enhance the already top-notch service offerings we are known for. If you can turn with me to slide 13. I would like to take this time to briefly introduce our IHH Lab business, which may not necessarily be familiar to all. We want to develop this really large business to be one of the world's most trusted medical laboratory services networks. You can see our lab services are already in the countries that we operate, leadership positions in many of these countries by revenue. In fact, for the first half of 2021, the lab revenue from these entities was at MYR 975 million. Ownership in SRL Diagnostics, of course, is indirect via Fortis. The reason why I like to highlight this, because labs are really at the forefront of our fight against COVID-19. On slide 14, you can see that we have provided more than 7 million COVID-19 related tests since 2020. This is going to be an essential and important service moving forward for us with all the testing that's required across the markets we operate in. We believe that beyond just COVID-19 services, our lab business has a high trajectory of growth going forward as well. I will now pass the call to Jorg to run through the operational performance. Let me just quickly comment back on the lab business. Look, this is a very strongly growing operation that we have, this is not just COVID related. We see the teams invest a lot in new test methods in CapEx to really grow the underlying core business. Look, we had MYR 1 billion in revenue contribution in first half. We have not made the step yet to a full segment disclosure. I guess starting next year, you'll see us disclose a lot more about the lab business. Margins well, well north of 25% average for our hospitals. Very attractive, comparatively lower CapEx business. A real focus area for us, and you'll hear us talk about this a lot more. On page 15, you'll see that inpatient admissions have increased year-over-year, basically across the board. However, we are not back to a pre-COVID period. I think this guides a little bit the watch out that I would like to put on the second half year. We are clearly, if you look at the inpatient operations behind, where we have been pre-COVID now. That's of course good news because it can create additional growth once patients return back. We really do have a runway there. At the same time, I think we need to be cautious in the near term in terms of cost build up and in terms of potential headwinds that come. We are, of course, optimistic with a great quarter, but we are a little bit cautious on the second half year. I think you should not just take first half and multiply it by two. That may leave us a little bit too much on the high side. Foreign patient volume in key markets such as Singapore and Malaysia remain low. We have just come off a call with our Malaysian CEO. The situation is not easy with our friends and colleagues there. We really support everyone on the ground to fight through this. Coming back to medical tourism and patient volumes, I think we need to be realistic. This will take a little bit longer time for recovery. It requires global vaccination programs to really take effect and international travel to resume so that foreign patients can return back. In the second quarter, revenue intensity has continued to rise. Look, we've all understood this by now. A lot of this is, of course, a mix effect. You have high-intensity cases staying with us during this period at this stage, and lower difficulty cases, they just don't show up at the hospital, and that is then leading to an increase in check size. I think we should not interpret too much into that. If we go on the next page, Malaysia, despite the MCO, which Malaysia has implemented from January, we deliver better performance with a low base in Q2 2020. Of course, revenues improved 53% to MYR 662 million. We've included here now Prince Court Medical Centre, and we've increased the contribution from our COVID testing, vaccination programs. The team is really doing a fantastic job in managing all this while being really careful and cautious on cost management topics. On the next page, in Singapore, very strong business, continuously strong, a +94% in EBITDA, of course, Q2 last year was really a difficult quarter. Also EBITDA margins, +6.6% at 34 percentage points. Inpatient admissions increased 22%. Revenue intensity continued to grow. Revenue is now at MYR 1.3 billion in the quarter with strong bottom-line contribution. If you go to the next page, Turkey and Europe, and this is where I really want to put a call-out on the team in Europe and Turkey. Very strong recovery after the Q2 last year, and you see this already in Q1. We saw a strong return of international patients, while we had very strong COVID-19-related activities. We saw revenues improve 72% to now MYR 1.1 billion. Welcome to the above MYR 1 billion club per quarter. That's fantastic. EBITDA increased to MYR 300 million. Inpatient admissions increased 49%. Look at the bed occupancy rates here at 78%. These are pre-COVID levels. Really strong performance and we are all hands out to the team there for doing a fantastic job. Look, as a corporate, it's always good to see a large division return bottom line contribution. That's really great. The currency topic has been an overhang for a long time. The team has hedged almost all of the foreign currency loan exposures. That part is behind us, but the team has done a lot more than that, and has been able to grow the international business contribution. We are showing here three parts of the business. One is the domestic patients, which of course still is the largest part of the business there. We look at foreign patients in Turkey, which is foreign currency business, and we look at the European operations, which is also foreign currency business. Out of the overall revenue from, let's say, 2017, 75% being basically Turkish lira denominated business, we are now at 40% foreign currency denominated business, and this trend continues to grow with the expansion plans that the team has in Europe. Really a strong natural hedge that we are building up here. We should not forget this, while a large part of the cost base is still in Turkish lira, and I think this is where the real performance improvement is then coming from. If we go to India, strong recovery already in Q1, Q2 continue now. We're at nearly 70% bed occupancy rate. Revenue grew 133% to nearly MYR 1 billion on contribution. Of course, India also went through a difficult COVID period, and yes, there were a lot of COVID-related activities and services that the operations have provided. EBITDA rose to MYR 188 million. Inpatient admissions rose 46% and revenue intensity increased 48%, as patients with more serious and urgent ailments sought treatments at our hospitals. Look, you see the Fortis market performance, which is, of course, fantastic. We love to see this as shareholders, to see a business do so well. Really happy on that development. Another great news on the next page, Hong Kong has achieved EBITDA breakeven in May as per plan. We have increased since then, and we see the team shifting the discussion from an EBITDA breakeven business review theme to a net income breakeven review theme. We started to set up plans on how can we get now from an EBITDA breakeven, which we have achieved, how can we continue this growth trajectory, and get to a net income increase. We're super excited. The Hong Kong team did really well. The business continues to ramp up. We saw revenue increase 46%. EBITDA losses narrowed, and as I said, in May, we were EBITDA positive. Really great performance there. Give, of course, one comment on something else that you saw in our financials. We have, of course, looked at the assets in China, and the key message there is China is a super attractive market. It's a great market also for private hospitals and for private healthcare providers. We have to be realistic. It is a market that takes a lot more longevity, and a lot more breadth to really ramp up the operation. Slowly, we do see improvements in our clinics. We see some improvements in our hospital in Chengdu. We see progress in the hospital construction in Shanghai. However, we of course work with our auditors. We have hard-nosed accountants in the team, and they have advised us to look at this a little bit more carefully, and we've decided to take an impairment hit on some of the assets that we have there. I think it's just prudent, in terms of managing our balance sheet and balance sheet risk going forward. With that, I pass back to Kelvin, for sustainability. Thanks, Jörg. On slide 23, you can see here IHH three-prong sustainability strategy covering critical areas involving opportunities for growth and learning for IHH to achieve economic, environmental, and social sustainability. On slide 24, you can see MSCI had improved IHH rating from BBB to A. Going forward, we won't stop here. There's more we can do, in the sustainability space. We will step up our efforts to lock in our long-term, sustainable business. Our ESG drive will be aligned very much to, of course, our presence as a global healthcare player. We are already pushing forward and leading some of the topics around value to patients, for example, making sure that the clinical outcomes, are great, at the same time, making sure that it is delivered to our patients at the right and best possible value for them, for example. To wrap up what we have discussed, here on slide 26. We have been on a strong recovery trend since June of last year, actually, when we took the brunt of the impact, in Q2 last year. There's been recent resurgent cases in the markets we operate in, therefore, there could be some near-term headwinds. We will maintain a discipline in executing our refresh strategy. We will stay nimble during these times as the pandemic evolves. We will continue to proactively deliver on our core strategic pillars that I've talked about before. We have now set along those strategic pillars targeted strategies for each market to ensure, and sustain our earnings growth. Further, we will create new revenue streams, as we have mentioned, for example, around our diagnostic services, particularly our laboratory business. We look forward also to developing other sustainable platforms, especially the digital platform where we'll create a seamless online to offline service to our patients. That also helps us to, of course, respond to this new post-pandemic world. With a healthy balance sheet, strong cash generation, we are well positioned to ride out the pandemic short-term headwinds, and we believe our long-term growth trajectory remains very much intact. With that, thank you so much, and I'll pass the call back to Penny. Thank you, Dr. Loh and Jörg. We'll now take your questions. Just a quick note before we start. We'll first take questions from the participants on the conference call, then before moving to the questions raised from our webcast participants. I would like to kindly request for each participant to keep to two questions. With that, operator, can you please proceed with the Q&A? Thank you. Thank you. We will now begin the question and answer session. Your first question comes from Rachel Tan of DBS Vickers Securities. Please ask your question. Hi. Good morning, Dr. Kelvin Loh, Jörg, and Penny. Congratulations on a very good result. Finally, we have seen Gleneagles Hong Kong has achieved EBITDA breakeven. Probably just two questions from me. I think in the presentation you have mentioned that you are a little bit more cautious for the second half of the year. I was just wondering, given now we are almost at the end of third quarter, what are some of the things that probably was very strong in the first half, but probably not so sustainable in the second half that warrants the cautiousness, as I think COVID-19 related services would likely remain in the second half. Yeah. Thanks. Thanks, Rachel. Very good point. Look, besides being generally cautious, I think there are a couple of points that we should be realistic about. We have had and we have seen cost favorability in the first half year that we don't think can be maintained in the long run. We have had difficulties in hiring sufficient staff here in Singapore. The labor competition with actions by the government to increase pay is also something we have to respond to. We need to be fair to our frontline workers. There is cost coming back into the system that was not there in the first half. I think that's one part. I think the second part is that we see, especially in India, a very sharp drop in COVID-related services and a rebalancing back to a more normalized business, but without the international tourists. I think there is a little bit caution that we want to have there, as well. I think overall, even though you are right, we believe that COVID service, testing services, and maybe soon we have to call them differently, no longer COVID service, but more like general mobility support or something. They will continue. That's clear. Will they continue at the growth rates, and will they continue in the magnitude that we saw in the first half? I think we have to see that. We do give a little bit of a cautious watch out for the second half. Look, don't misunderstand me. We're not going to fall off a cliff. That's absolutely not what's going to happen. I just caution a little bit to take the first half and multiply it by two. I think that would be a bit too simplistic. Got it. Thank you. That's very clear. My second question is on, I think you've given some color on your lab business, and it seems like it's a very interesting business. Any thoughts of spinning off the lab business as an individual entity? Thanks, Rachel. I think premature for us to comment on that. For now, we just wanted to mention that for us, we have, firstly, a very large laboratory network already, as shown on the slide. Secondly, we intend to drive that business, because it has a different growth dynamic. It has a superior return on equity dynamics, therefore, we see looking and driving that business growth in a whole new way going forward. Okay. Maybe if I could follow up, what are some of the consideration of having it as internal or spinning off a separate business? Yeah. Actually, for most of our four markets, internally, it is already a separate business entity. For example, in Singapore, it's called Parkway Laboratory Services. In Malaysia, it's called Pantai Premier Pathology. In Turkey, it's called LabMed. These companies are in effect, they're not serving only our hospitals, they're also serving the external market as well, which continues to grow. Okay, great. Yeah. Thank you. I'll go back to the queue then. Thank you. Thanks, Rachel. Next question. Your next question comes from Shyam Srinivasan of Goldman Sachs. Please ask your question. Hi. Good morning. Thank you to Dr. Kelvin and team for the opportunity. The first question is just on the recovery of the non-COVID part of the business in the hospitals. I think Jörg mentioned, I think, Acibadem seems to be already back to pre-COVID, but just want to understand the rest of the geographies, where we are, and given the kind of cautious tone on admissions, I thought, not necessarily the entire business. What is the COVID occupancy in our hospitals, which might probably come off in the second half so that we can get a sense of what is the non-COVID versus COVID occupancies? Sure, Shyam. Thanks so much for your question. Good to hear from you as always. Let me give you a sense. It's somewhat different in the different markets. The first part of your question that relates to how has the rebound been in terms of non-COVID services. Turkey, you saw certainly both the foreign patients as well as domestic patient has come back largely. In Singapore, the domestic market has largely returned to pre-COVID levels. In India, it fluctuates because the situation there is actually much more volatile. Whenever there's a big COVID spike, the non-COVID patients go down. When the COVID spike goes off, then the domestic volume signs back dramatically. I wouldn't say that it's back to pre-COVID yet, but I dare say that the domestic market has also substantially come close to pre-COVID. In Malaysia, in a situation where you see the COVID outbreak sort of still not in its completely controlled situation such as Malaysia, then you can expect that the non-COVID volumes are not fully returned. With regards to what is the COVID occupancy, it is fair to say, and I think that's what Jörg was alluding to. In terms of COVID occupancy in Q2, we certainly saw a big boost for India. Again, I dare say that as soon as that melted off, we saw a very quick return in non-COVID cases in India. Other than that, we didn't have much COVID inpatient admissions in, say, for example, Malaysia, Singapore. The overall COVID-related revenues, I think we had it on one of the slides. That was one. Yeah. That was one of my first slides, actually. You can sort of get a sense from there. Does that help answer your question? Yeah. Dr. Kelvin, that doesn't split out lab versus hospital, which is where the challenge was. I'll refer largely to the hospitals in my comments. With regards to labs. Very much. it's fair to say that the labs are continuing their non-COVID work. The non-COVID part of the business, of course, in a way, goes up and down to some extent with what you would see in the hospitals. The COVID work in the labs have grown and continue to grow throughout all this time, and I'm generalizing that for our markets. We don't see that going up and down so much because obviously the labs are still very much involved in testing, right? Testing doesn't go away just because the search has come down, and that would be true in all our markets. Got it. Second question, just I think you also alluded to the share price of Fortis, how it's done. In the next month, I think Fortis management has indicated the final Supreme Court order is going to be out. How are we looking at our stake there? I'm asking a hypothetical question in case the open offer gets released by the Supreme Court. That was at INR 173 years back. Stock today is INR 280. What do we think about taking a stake up to, say, historical levels we have seen in the Indian hospitals like Global and Continental that we have had? Firstly, indeed, the Supreme Court has concluded its hearing as of 12th May. I think we cannot predict when the MTO will begin. Of course, we are hopeful for a positive outcome soon. For our legal advice, we actually on no obligation to revise the MTO price. We will, of course, await the outcome for the SC order. We will consider the options from there. I think it's worth noting that we currently already hold a 31.1% stake. We, of course, already have majority control of the board. We are consolidating. We are very happy with how Fortis it has performed so far and it's continuing to grow well. Thank you. Got it, and all the best. Thank you. Thanks. Thanks, Shyam. Next question, please. Your next question comes from Divya Gangani of Morgan Stanley. Please ask your question. Thank you for the opportunity. Good morning. I have two questions. The first is on Singapore. I wanted to understand what is the contribution of border screening and on-arrival testing to the entire COVID revenue that you've given on the slide? Just wanted to understand what the portion coming from border screening and on-arrival testing specifically is, because I guess that's going to be more sticky compared to the COVID treatments and vaccinations. That's my first question. I don't think they have it split out here specifically with regards. Well, overall, Singapore, Q2 2021 revenues, 24% of that was COVID related. I'd say that the border screening and on-arrival tests probably make up about half of the COVID revenue. Okay, got it. No, that's very helpful. Thanks. My second question is just on Turkey and the Hong Kong margin. In Turkey and Europe, we've seen that the margin in this quarter had gone up quite nicely. The EBITDA margin is over 28%, which is one of the highest we've seen in recent quarters. Just wanted to understand what's driven the margin improvement there. Is it just operating leverage and scale coming through or the way you commented on the first half not being a good representative for the second half as costs come through? Could you comment on Turkey in particular, whether these margins are a bit more sticky? My answer is overall, I think so. Maybe I'll ask Evren to help out. Evren, are you on the line? Yeah, sure. Sure, Kelvin, good morning from Istanbul. I think the response lies with the performance in twofold in this quarter. If you look at the first half, particularly in April, we had relatively higher COVID exposure, which kind of started to melt down towards the end of the quarter. I will give you a specific example. 14% of our April revenues came from COVID versus our COVID contribution was only 4% in June, and then we were still able to deliver the similar EBIT margin. In the same month versus April, which is a very good example of we have more of a more sustainable margin. The reason that's coming from multiple factors, obviously domestic patients coming back, but we also very strong recovery and improvement in our foreign patient volumes during the quarter, and it's been increasing consistently. That also helps out in more streamlined margins. Could I clarify. Thank you. When you made the comment on COVID, is it that COVID is typically lower margin, and despite the lower margin in April, the margins were the same? I'm just trying to understand the contribution of COVID, how that impacts margin. COVID in Turkey is relatively higher margin than non-COVID. In April, we had 14% of our revenues coming from that business line. Even though that COVID business scaled back in June, we were able to deliver similar margins because of the reasons that I just explained to you. I see. Yeah. Okay. That's absolutely clear. Does that answer your question? Yes, that's very clear. Thank you. Just on the Hong Kong margin, just wanted to get a comment on, you said you're focusing on net profit contribution going forward. Any new timelines you can give, plus how you've seen the business ramp up? Is Hong Kong going to be more like a When do we get to Singapore or Malaysia-style margins? What kind of time period are we looking at? Thanks. I think let's just say that, we believe the Gleneagles Hong Kong business, the early period of gestation, and I would say the heavy lifting part that builds the brand, gets doctors and patients in, I think that's largely over. We are on a phase where we expect the trajectory to be more on a upward incline. Certainly quite positive with regards to its growth trajectory from here. As you know, hospitals work in such a way where the overhead costs sort of come pretty far up front. Once you get past that, then most of the revenue is just contribution margin, right, which is 30% or 40% range. We are excited about this business. We expect it to move forward strongly. Of course, there could be some near-term headwinds with regards to COVID and the degree of social movement restrictions in Hong Kong that may hold back its ability to chart forward. Otherwise, I think, it's come of age. Right. Just to ask on that, occupancies are already at 61%. Typically, when hospitals reach over 60%, 70% occupancy, they start making good money. So just based on past experience, how long does it take to get to normalized levels once you've broken even? Is it three years, four years, five years? Just to get a sense based on past experience. The bed occupancies we have been reporting as a percentage of open beds, which is currently stands at, I think for Q2, it's 61% on 194 beds. It's not so useful to read that per se in isolation because we keep opening beds in Hong Kong. As we find that it starts to build up capacity, we keep opening beds. You'll find that the bed occupancy percentage may not appear to grow, but in terms of average daily census, that's going to grow. Great. Okay, thank you. Thanks, Divya. Next question, please. Your next question comes from Sean Chu of RHB. Please ask your question. Hi, thanks for taking my questions. Can you hear me? Yes, we can. Go ahead. Yeah. Firstly, mainly on Malaysia. Would you be able to provide a little bit more color on Malaysia's quarter on quarter growth, despite the imposition of lockdown during that period? Was it mainly driven by cost containment measures or was it patient flows being undeterred by the restrictions? Thanks. Most of the growth in Malaysia, quarter-on-quarter meaning from Q1 2021 to Q2, or are you referring to previous-year quarter? Yeah. Q1 to Q2 for the year 2021. That's been largely continued growth in patient volume. What we see in Malaysia, since the impact of COVID, is that we are seeing quarter after quarter of progressive improvement in volume growth. I would say, as I mentioned earlier, it's not fully back to pre-COVID times in terms of the non-COVID volumes. The growth has been progressive, a bit, I guess, somewhat affected by the recurring COVID situation in Malaysia. Got it. Just to follow up, what was the percentage of inpatient volume for the second quarter is actually contributed from decanted patients from public hospitals? Relatively small because I think the admissions of COVID patients to the private hospitals started pretty late in the quarter. Overall, the impact to the quarter, I think, was quite small in terms of actual inpatient. Would you expect this contribution to grow in the Q3, given the declining value? It appears to be because we started taking more patients into the hospitals. We have announced that we have set aside about 250 beds for COVID to help out. As we speak, probably about half of those beds are in use. Okay. All right. Thanks. Maybe perhaps final question on India. Just wondering if there's any potentially receivable risks or late payments coming from the COVID situation? No, not really. Our collections actually have been doing quite well. Okay, thanks. Thanks, Sean. Next question. Just to the topic on receivables, of course, this is always a risk in such crisis periods. We have, together with the country CFOs and the country operations teams, established a much more rigorous review on accounts receivables, on critical overdue situations. While you do see the one or the other small case that happens, there's no trend that there's any delinquencies or an increase in overdues or any risk in that area. The teams are doing a really good job to keep AR under control. Thank you. Your next question comes from Amanda Foo of Credit Suisse. Please ask your question. Hi. Good morning. Thanks for the call, and congratulations on the good set of results. I have a few questions on my end. I think, first of all, Jörg, if I could find out a little bit on your ROE. I know that you've cautioned during the presentation that Q2 is slightly higher than the normal run rate. Can I check, under the normal run rate, would that have already crossed or surpassed the initial target of five-six percent? Given the recent developments, is there a refreshed target for management to work towards? What could the longer-term ROE look like for the group? I think very good observation. I think structurally we are above the fice percent, and that is mostly a function of really CapEx prudence, and the underlying earnings improvement in our business. I think we are in the range of above five percent, five-six percent structurally. We've not discussed a new long-term target yet. I think it's a little bit too early to think about that. Of course, if we can, at one stage, consider something double digits, it would be great. I think it's a little bit too early to talk about that. Okay. I guess we can take it that going forward, a five-six percent ROE should be achievable barring unforeseen circumstances, right? Yeah. Yes. Okay. I wanted to find out a little bit more on your labs business. Which markets are the larger contributors right now? Would test volumes be a fair indication in terms of their contribution? I believe during the Q&A or the presentation, Dr. Loh did mention that the existing labs are also servicing the external market. What would the rough split be for the internal and external markets? Test volume, of course, is a good indicator. You quickly recognize that, of course, there's a currency effect, a different absolute price point if you take into account currency effect in the different markets. In terms of the percentage split, it's fair to say that in general, especially our core markets such as Malaysia, Singapore, and even Turkey, for now, the larger chart or the bigger predominance of the lab business is from our own businesses or hospitals. That is certainly growing quite rapidly. Thank you. If I could follow up on that, would it then be fair to assume that probably Singapore would be one of the larger contributors to your labs business? Yes. Or- I think it is fair to say that. Okay. They are probably the largest at this point, right? I think if you look at revenue, you would have SRL in India with a much broader footprint, is revenue-wise certainly the largest, and then Singapore would be the second largest, yeah. Look, let's focus more on the total lab business disclosures and at this stage, not so much at the individual dissecting of where this comes from, I think we're super happy that we've come to a point where we want to disclose our lab business. We've contributed MYR 1 billion in the first half year. EBITDA margins are well north of 25% average for our other hospitals. I think this is a really great business. Got it. Thank you, Jörg. That's all from me. Thanks again. Thanks, Amanda. We quickly take the questions from our webcast. It's coming from Nicole, UBS. First question, what was the Prince Court's contribution to Malaysia's revenue and EBITDA in Q2 2021? Prince Court quarterly revenue contribution is about MYR 65 million. Then I move on to question number two. What is Q3 looking like? Are you seeing return of non-COVID patients, especially in Singapore and India? The quick answer to that is yes. I took pains to explain just now that we do see growth of non-COVID patients across all markets. It's just that the rate at which that bounces back we see that differently. In India, we see that really strong dynamic. It comes back really fast. Whenever the COVID surge goes down, the non-COVID patient bounces back really fast. In Singapore, we see that progressively coming back. In Singapore, our domestic volume has already returned to the pre-COVID times. It's just that the foreign patients have not come back, of course. When do I expect medical tourism to return to Singapore? We don't know. I think it's suffice to say that, borders reopening, there'll be a cautious stance towards that. Who knows? Hopefully sometime next year. I'm not so sure it will happen within this second half. Thank you, Dr. Loh. Operator, we can turn back to the questions from the audience on the call. Thank you. Your next question comes from Rachel Tan of DBS Vickers Securities. Please ask your question. Hello. Hi. Sorry, I have a few more questions. Just maybe just to understand on the Gleneagles Hong Kong ramp up. I think occupancy has been quite stable at 60%, and you are likely going to open more beds. I just wonder, moving forward in terms of your plans to open more beds, will it push EBITDA back to losses again, or there will be minor contributions from EBITDA profits until Gleneagles Hong Kong becomes more stabilized? The answer is option B. The way we run our hospitals is, we try not to make it lumpy. We try to ramp up in pari passu with the growth. Okay. Contributions will start off low first, and then slowly will move up a little bit more. Profit. As in EBITDA. Yeah. We expect the EBITDA to grow from here, not to take recurrence nor dive, if that's the question. Okay, got it. Yep. My second question is on the European business. I think this time around you're seeing that European business has been growing. Is there a target to grow the European business bigger? With that target, are you looking to expand more in Europe rather than in Turkey? There isn't a fixed target per se, but let's just say, when we talk about the European business, I guess we can think of it in two components, right? One is the foreign market that comes into Turkey. We of course want to grow that. It is growing well. Acibadem, very strong brand, drawing foreign patients from Europe as well as outside Europe. Definitely want to grow that. In terms of the beachhead that the brand has launched into the European markets, i.e., patients in those countries itself, we progressively grow that in a capital efficient way. As we gain more and more experience in operating there, I think we want to continue to grow. We've done so very successfully, gone as far as Oma, the newest hospital that we opened in Amsterdam, that has done very well. In fact, we are looking to expand that hospital now. We also, as part of that whole cluster there, have just acquired a hospital in Serbia as well. Okay. Just a follow-up on Turkey. I noticed that on the net profit level, they seem to be contributing already. I'm just wondering whether your finance cost, and with the limited Forex fluctuations exposure now, is this considered a normalized level for you for the Turkey business? We're looking and reviewing the finance costs for Turkey. It's of course high. Turkish lira denominated at this stage. We are looking at this, how we can improve from here. You'll see those discussions come through in the next couple of quarters. Okay. Sorry, maybe just one last one from me. Just on the Chengdu impairment, could you give more color on the impairment? Would there be opportunity to write back those impairment once Chengdu is back on its feet? Yeah, look, write back would be fantastic, if that would be a possibility, then accounting wise, let's look at that once the business comes back. I think it's really more a mathematical function of looking at a DCF model in our impairment tests and coming to the realization that the ramp-up stream, it just simply takes longer. We do believe in this business. It's a good business, but it takes longer to build branded patients, get doctors. Look at Hong Kong. Once we started to get really good doctors in, build a reputation for ourselves, offer services, suddenly you do see it becomes like a magnet. This takes time. In China, our experience is, it will take a little bit longer time there. We just said, "Look, from an accounting prudence perspective, we cut off the DCF model at one stage, and if it then doesn't carry, then let's write this off." Is there an opportunity to write it back? Let's take this quarter by quarter. Okay. Maybe based on your estimation, would you be able to give us roughly a timeline in terms of how much more extension of ramp-up for Chengdu have you estimated in your numbers? In terms of how many years for recovery? Yeah. Look, I think you're not talking in quarters, you're talking in years, right? If you look at other hospitals, and we've done some benchmark studies, people do talk about four or five years to break even, and in some cases longer. This is a big hospital. I think we need to be realistic. I think we should not be overly aggressive in assuming that there's any magic stick happening and then there's a pop. Yeah, this will likely take quite a long time. Okay, great. Yeah, thanks for answering all my questions. Thank you very much. Thanks, Rachel. I see quite a few questions that's coming in from the webcast, and I think let us address some of the questions on the webcast, and then I think we're running out of time, and I think with the rest we can take it, the discussion with IR directly. To the first other question on the webcast. "Hi, Dr. Kelvin and team," which is from Alan, RHB. "May I know what is the driver behind the improvement in ESG rating from A to A from BBB? How has COVID-19 changed the landscape of ESG for IHH?" Maybe I can quickly jump into the first one, and then Dr. Loh can take over the second question. I think in terms of the MSCI rating, where we saw the improvement was, maybe think of first, there's an improvement in terms of the data security disclosure and anti-corruption measures that IHH had disclosed, and obviously that was first to drive the upgrade. Obviously, I think, as the MSCI team continued to look at our product offering, I think that's where we continue to showcase a very good product offering, as well as continue to uphold our clinical governance and standards. That's another factor that has driven the increase. I think that answers question number one. How has the COVID-19 changed the landscape for ESG for IHH? Long-term trajectory, I don't think so. We are very much committed to driving value for our patients, helping out communities, and of course, topics around waste management, governance have been all very important topics for us. I'd say that the biggest acceleration that's come about is really the public-private partnership. Personally, I am excited about that opportunity. COVID-19 accelerated that, given us in the private sector a chance to partner the public sector better, to help with this huge spike in healthcare demand, right, brought upon by a pandemic like COVID-19. No one sector by itself, whether public or private, can cope with this kind of huge demand. That kind of collaboration that has come about, I think, brings a lot of value to the public sector. Okay. The next question from Carmen, from CIMB. "There is a MYR 224.8 million income from India. Can share with us where does this come from?" Maybe let us address with you directly, because I'm trying to determine where is that MYR 224.8 million income that you're referring to. Let us come to you on that question separately, all right? Then we'll jump to the last question from Chong Lee Yap from Morgan Stanley. "From the earlier answer on Turkey, COVID margin are higher than non-COVID. Is that the same for Malaysia and India? We would like to understand how the change in Malaysia and India easing of COVID affect margins in second half. Yeah, I think very good observation. I think the way to look at this is that a lot of the COVID businesses is an incremental marginal contribution without adding Overhead costs or the staff cost to it. There's some increase in or some dedicated staff cost. A lot of times the COVID activities and business is using existing infrastructure, your marginal contribution is indeed higher than the hospital business. This is the case in India and Malaysia. Not as much in Malaysia. It is more separated. I don't think in Malaysia you will see a major difference. In India, for sure, there is some of that similar effect. Look, you've heard me talk about the second half year. We're very excited about the second half year. We think there's a lot we have going in our direction, but we need to be cautious. We need to remain cautious. We're in the middle of a pandemic, and I think it's good to assume that some of the favorability that comes through this business may not be there in the long run. Okay. Thanks, Jorg. Maybe I can quickly address the question that Carmen had given earlier, asking us where the income of MYR 224 million came from. I believe she could be referring to under the exceptional item list, where there is an MYR 85.8 million from re-measurement of the fair value of interest in a joint venture. I think that refers to that DDRC SRL re-measurement of fair value. The second one is the gain on disposal of a joint venture of MYR 139.1 million. That refers to the disposal gain of Apollo Gleneagles. All right? I think that we are running out of time. I would like to thank everyone for joining us on the call today. If you have any further questions, feel free to reach out to us at IR via email at ir@ihhhealthcare.com. With that, we'll now conclude the IHH Healthcare second quarter and first half 2021 financial results call. Thank you for joining us today. Operator, you may disconnect. Thank you. Thanks, everyone. Thank you.